Market Insight

Zenterio acquires Adscribe

January 03, 2017  | Subscribers Only

Cecilia Zhu Cecilia Zhu Analyst, Connected Home
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TV operating system provider Zenterio has acquired the remaining 75% of the ad-tech company Adscribe. The strategic partnership between Zenterio and Adscribe has been established since 2015, when Zenterio initially acquired 25% of Adscribe. Based in Sweden and UK respectively, the two companies are teaming up to develop interactive advertising and data analytics.

Our Analysis:

A full acquisition means that Zenterio is determined to strengthen its collaboration with Adscribe and enhance its advertising and analytics capabilities to provide more attractive value packages to its pay TV operator customers. In the pay TV market where traditional revenue streams are levelling off, and where pay TV operators are looking for new opportunities for monetisation, the Zenterio acquisition is well aligned with service providers’ needs.

From Dynamic Ad Insertion to programmatic and interactive ads, advanced advertising services have proved appealing to pay TV operators and vendors. In an interactive advertising model operators can bring interactive ads to viewers based on the content they are viewing in a non-intrusive way. By contrast, the linear TV advertising model is collapsing due to the proliferation of non-linear online viewing and increasing production costs.

Set-top data is used to inform interactive advertising on TV, as it ensures the effectiveness of ads can be measured to deliver better value. User data collected from STBs provides insights into how TV and advertisements are being watched. This is increasingly important in a multiscreen world where operators don’t necessarily charge additional fees for using multiscreen services and struggle to monetise them effectively. Operators will need to have advanced systems for capturing data that allow them to come up with a wider range of packages and pricing structures to balance changing viewing behaviours with the acquisition costs and margins.

This deal represents Zenterio’s strategy for integrating interactive advertising into TV offerings through a back-end middleware solution. As a STB software provider, Zenterio provides middleware for interactive TV but lacks the advertising and analytics capabilities. The company has been developing a Value Added Services (VAS) proposition, where it focuses on user experience, interactive advertising, content discovery and other extra services that go beyond an OS. The current Zenterio OS is already integrated with AdScribe’s solutions for data analytics, applications and advertising. Adscribe, in many respects, meets the needs of Zenterio as it specialises in the ad-tech space and offers a cloud-based big data platform to brands and content owners.

Collaboration is becoming crucial for companies who want to capitalise on interactive advertising. The partnerships between pay TV operators, advertisers and middleware vendors are being redefined: Operators can help advertisers reach wider audiences with minimal waste and target specific audience segments, and middleware vendors can enable the ad features through integration, which shortens the time-to-market and reduces the cost for operators. It is likely to see more consolidations in the advanced TV advertising market.  

Organization
Zenterio
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